J&J to pay $1 Billion for sleazy sales of antipsychotic drug

Johnson & Johnson will pay more than $1 billion to the U.S. and most states to resolve a civil investigation into marketing of the antipsychotic Risperdal, according to people familiar with the matter.

J&J, the world’s largest health products company, reached an accord last week with the U.S. attorney in Philadelphia, according to the people, who weren’t authorized to speak about the matter. It doesn’t resolve negotiations over a possible criminal plea, they said…

J&J, based in New Brunswick, New Jersey, disclosed in August that it reached an agreement to settle a misdemeanor criminal charge related to Risperdal marketing. The company is in negotiations to pay about $400 million more to settle this portion of the investigation, one of the people said…

A majority of U.S. states will join the settlement, the people said. Which ones will accept the final agreement hasn’t been determined, they said. Each state can decide whether to join the federal government’s settlement or pursue its own case.

Typically, states with cases in court continue to pursue their own. Texas alone is asking for more than $1 billion in a case that goes to trial next week. Risperdal, which was first approved by the Food and Drug Administration in 1993, later became J&J’s best-selling drug…

The FDA approved Risperdal in 1993 for psychotic disorders including schizophrenia. That market is limited, and Janssen sought to sell Risperdal for bipolar disorder, dementia, mood and anxiety disorders and other unapproved uses, according to documents in the lawsuit by the state of Louisiana.

Hundreds of Janssen salespeople sold to doctors, nursing homes, Veteran’s Administration facilities and jails, the records show. Marketers gave doctors materials about studies of unapproved uses for Risperdal. Janssen sponsored clinical trials of the drug’s effect on other illnesses…

“The ultimate resolution of the above criminal and these civil matters is not expected to have a material adverse effect on the company’s financial position,” J&J officials said in the filing.

Of course it won’t. Johnson and Johnson – in 2010 – had $62 billion in revenue, gross profit of $42.8 billion, and net income after taxes of $13.3 billion.